Are distortions good for development? Structural transformations and cotton in Uzbekistan

Lorena Lombardozzi

No 193, Working Papers from Department of Economics, SOAS University of London, UK

Abstract: Agriculture is at the origin of all economic activities and thus obtains a notable position in growth theory. The contribution of primary sector to long-term economic development has given space to asymmetrical positions. In the current context of globalized markets and downsized states, Uzbekistan is incontestably an exceptional case-study, applying distortive measures to its economy, and to agricultural sector in particular, to actively shape its comparative advantages. With reference to the cotton sector taxation in Uzbekistan, this analysis proposes to shed light on the implications of the main theoretical arguments around distortions. It will investigate the ìcircular cumulative and interactive processî produced and how it is being a driver of structural transformation, to exploit economies of scale and transfer capital investments for heavy industry, concluding that distortion can actually be instrumental for development.

Keywords: cotton; cash-crops; structural transformation; Uzbekistan (search for similar items in EconPapers)
JEL-codes: O40 O53 P16 P21 Q10 (search for similar items in EconPapers)
Pages: 32
Date: 2016-01
New Economics Papers: this item is included in nep-cwa and nep-hme
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